SEC Revokes Credit Company’s License Regarding Debt Collection Practices
THE SECURITIES and Exchange Commission (SEC) revoked the Certificate of Authority held by Familyhan Credit Corp. which allowed it to operate as a loan company after a finding of unfair debt collection practices.
In an order dated April 13, the SEC’s Corporate Governance and Finance Department (CGFD) found that the loan company had committed three violations of SEC Circular No.18, 2019 series. The circular specifies which debt collection methods are considered unfair.
Specifically, Familyhan Credit was found to have contacted people on the borrower’s contact list who were not listed as guarantors or co-creators in the loan agreement.
“Notwithstanding the borrower’s consent, contacting people on the borrower’s contact list other than those who have been designated as guarantors or co-creators also constitutes unfair debt collection practices,” said CGFD .
The CGFD also said it had given Familyhan Credit time to adjust its collection practices to comply with the memorandum.
Familyhan Credit has also committed eight violations of Republic Law No. 3765 or the Truth in Loans Act (TILA) and SEC Circular No. 7, Series of 2011, which sets the rules for wagering. implementation of the TILA law on transparency. loan operations. The rules are designed to discourage the uninformed use of credit.
The CGFD found that the lending company had not disclosed the actual cost of the loans to its borrowers.
âClearly, net loan proceeds are one of the minimum (pieces of) information that must be disclosed by a creditor to its borrower. Thus, in the absence of such information, the respondent cannot affirm that he duly complied or substantially complied with the TILA â, explained the CGFD.
Familyhan Credit filed a petition for reconsideration, which was dismissed by the CGFD for lack of merit in a resolution dated June 18.
The SEC has so far canceled the licenses of 35 finance and loan companies for various violations.
He also revoked the registration certificates of 2,081 loan companies for failing to obtain a certificate of authority. The total number of online loan applications ordered to cease operations now stands at 58 without authorization to operate as a loan or finance company. – KCG Valmonte